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Our experts frequently write blog posts about the findings of the research we are conducting.

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Displaying 10 out of 17 results for "Non-Traded REITs".

BlueVault Partners' Non-Traded REIT Study: Even the Winners do Worse Than Traded REITs

We have noted in our research and our posts that non-traded investments including non-traded real estate investment trusts (REITs), business development companies (BDCs), oil & gas and equipment leasing partnerships typically have extremely high upfront and ongoing fees. Because of these high costs, illiquidity, lack of transparency and conflicts of interest, these investments should underperform liquid, lower-cost traded investments with similar underlying exposures. For example, non-traded...

SEC Examiniation Priorities 2014

The Securities and Exchange Commission (SEC) senior staff recently announced their 2014 examination priorities . The national examination program will be focusing on fraud detection and prevention, corporate governance, and registrants that serve as both a broker-dealer and investment adviser.

SEC staff also plans to undertake initiatives that examine the rollover of retirement vehicles during employment transitions or near retirement. In particular, the staff is concerned about misleading...

FINRA Regulatory Priorities 2014

Early this month, the Financial Industry Regulatory Authority (FINRA) released their 2014 regulatory and examination proirities . FINRA is continuing to focus on the suitability of recommendations made to retail investors. FINRA specifically mentions complex structured products (including leveraged ETFs), non-traded REITs, frontier funds, and interest rate sensitive instruments such as mortgage-backed securities and municipal bonds. At a recent conference, a FINRA representative added that...

Another Non-Traded REIT Lists Shares, Revealing Losses

Shares of non-traded real estate investment trusts (REITs) were sold in large amounts during the real estate bubble of 2005-2007. Without an observable trading price, sponsors simply fixed the share price of non-traded REITs at $10 per share. As real estate markets have collapsed and now begun to recover, it has been difficult to ascertain just how much those $10 shares have changed in value. Non-traded REIT sponsors are now required to estimate per-share net asset values, which have...

Five Broker-Dealers Ordered to Pay over $10 Million in Restitution for Non-Traded REIT Sales

Back in May, Massachusetts securities regulators ordered five independent broker-dealers to pay over $6 million in fines and restitution for improperly selling non-traded REITs. It also settled separately with another broker-dealer, LPL Financial, for an additional $2.5 million. Just yesterday, Secretary of the Commonwealth William Galvin announced an additional settlement with the same five broker-dealers for an additional $10.75 million in additional restitution for improper sales of...

Update on Inland American Non-Traded REIT

Inland American Real Estate Trust, the largest non-traded real estate investment trust (REIT), has been the subject of intense scrutiny. In many ways, the criticism of Inland American has been representative of the issues endemic to non-traded REITs generally, such as poor dividend coverage, conflicts of interest, excessive payments to affiliates, stale or poorly updated share prices, and other issues we have discussed on this blog and in our research work . While these issues have been...

Massachusetts Fines Five Brokerage Firms for Sale of Non-Traded REITs

Secretary of the Commonwealth of Massachusetts William Galvin, who has previously come out swinging on behalf of investors in both warehoused CLOs as well as leveraged and inverse ETFs, announced yesterday that the state has settled with five independent brokerage firms regarding improper sales of non-traded REITs. Non-traded REITs are pooled real estate investments that have become notorious for high fees, lack of liquidity, and numerous potential conflicts of interest, as we detail in our...

New FINRA Guidelines for Non-Traded and Private REITs

In recent months, FINRA has been investigating how non-traded and private real estate investment trusts (REITs) are presented to retail investors. Last week, FINRA alerted broker-dealers that they had uncovered "deficiencies" in how these investments are sold, and issued Regulatory Notice 13-18 "to provide guidance to firms on communications with the public concerning unlisted real estate investment programs, including unlisted real estate investment trusts (REITs) and unlisted direct...

Valuations of Non-Traded REITs

Earlier this week, the Investment Program Association (IPA) presented their guidelines for the valuation of publicly registered non-listed REITs. According to the IPA, these guidelines are supposed to "enhance the independence of the valuation process" and "enhance the quality of valuation disclosures to the investing public." For a discussion of the guidelines, see Brian Louis's recent story on Bloomberg.com.

Non-traded REITs -- real estate investment trusts that are registered with the SEC...

More Trouble for Inland American Real Estate Trust

Inland American's March 2012 quarterly report revealed that the company was the subject of an ongoing SEC investigation (we wrote about this in our blog post titled "SEC Investigation into Largest Non-Traded REIT May Be A Sign of Things To Come"). Inland American's 2012 annual report further disclosed that several stockholders have sued the company seeking recovery of damages (View the SEC filing). According to the information in Inland American's SEC filings, both the SEC investigation and...

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